February 20, 2015 – Republic of Mining

PRECIOUS-Gold turns down as Greek accord is drafted, 4th weekly drop – by Marcy Nicholson and Clara Denina (Reuters U.K. – February 20, 2015)

February 20, 2015

http://uk.reuters.com/

NEW YORK/LONDON, Feb 20 (Reuters) – Gold turned lower in choppy dealings on Friday, flirting with a seven-week low after the euro zone discussed extending the Greek bailout by just four months, while prices headed for their fourth straight weekly drop.

A draft text on extending Greece’s bailout from its international creditors proposes prolonging the program by four months rather than a previously suggested six, officials from Greece and other euro zone states said on Friday.

Spot gold turned down 0.7 percent at $1,198.55 an ounce by 2:49 p.m. EST (1949 GMT). The metal has lost 2.5 percent so far this week, dipping to its lowest in six weeks at $1,197.56 on Wednesday, when hopes for a successful resolution to Greece’s debt talks boosted investor appetite for risk.

U.S. gold futures for April delivery settled down $2.70 an ounce at $1,204.90 on the day. “Overall, gold is lower as the market grows increasingly optimistic about a positive resolution, hence less need for a safe haven investment,” said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.

The euro traded near session highs against the U.S. dollar after the Greek bailout was drafted.

Resolution of Native Land Claim Settlements Critical to Future of Canadian Economy – by David Duval (The Duval Report – February 17, 2015)

February 20, 2015

http://duvalreport.com/

In economic terms at least, Canadians have often been described somewhat simplistically as “hewers of wood and drawers of water” – that is to say our economy is essentially resource-based.

While the contribution of natural resources (primarily energy, metals and minerals) to Canada’s Gross National Product remains at record highs, never before has this sector’s contribution to our economic success been so important – and more threatened.

The elephant in the room is the ongoing legal challenges pursued by Aboriginal peoples who are seeking to resolve past injustices and assert their constitutionally guaranteed legal rights over resource development on their traditional lands.

Canadians are generally naive about the impact of commodity prices and resource development on the nation’s economy. The same applies to the consequences of not resolving longstanding native land claim issues which, incidentally, are supported by British colonial policy. In fact, that colonial policy recognized Aboriginal tribes as sovereign nations whose title to the land was recognized by English law and international law.

According to Bill Gallagher LLB, an authority on the rise of native empowerment in the Canadian resources sector, First Nations have achieved an enviable record of success pursuing land claims issues in the courts. More than 203 rulings countrywide have gone in their favour so far. In British Columbia, where unsettled claims have fueled resistance to projects such as Enbridge Inc.’s Northern Gateway pipeline, (which has over 200 preconditions for development) and Kinder Morgan’s Trans Mountain pipeline, their record is 11 out of 13.

What Citi misses about mining revolutions – by Kip Keen (Mineweb.com – February 20, 2015)

February 20, 2015

http://www.mineweb.com/

Advances in mineral exploration are needed to support discoveries.

Citi Research takes a stab at so-called disruptive technologies concerning metals and mining in a recent research report. It’s a nice overview on a number of fronts especially as far as solar and silver, lab-grown diamonds and metal-use in cars go. In short: silver’s there to stay, lab-grown diamonds could disrupt the industry in the years to come (but consumers will decide), and PGMs look solid.

But the report misses, or doesn’t treat, a few areas that deserve some attention. In particular, there was scarce mention of exploration technology, seabed mining and mineral processing.

I won’t go into all these areas here. As it stands, I have some questions out to mineral processing specialists for their thoughts on what technologies or processes stand to have revolutionary (or at least pretty meaningful) impacts on the mining sector. That is, like the impact of heap leaching, what technologies might unlock hitherto uneconomic deposits or cheapen the conventional flow sheet? Seabed mining, I’ve recently touched on, so I won’t go back there right now.

Which leaves us exploration technology to consider.

[Ontario] Prospectors’ future in jeopardy (Northern News – February 17, 2015)

February 20, 2015

http://www.northernnews.ca/

KIRKLAND LAKE – The frustrations and problems prospectors are facing as they try to stay in business was front and centre at the Northern Prospectors’ Association’s Annual General Meeting. NPA President Gino Chitaroni didn’t sugar coat the very real challenges prospectors are dealing with. During his opening address Chitaroni stated, “I wish these were good times but sadly they are not for us in the industry. We are now at a crossroads where our whole industry and way of life is completely threatened.”

He sees prospectors facing three major issues. The first is the lack of financing, the second is over regulation and bad government regulatory guidelines and the third is the empowerment of First Nations at the expense of the mining and exploration industry.

In terms of being able to raise money for projects, Chitaroni said that is currently a world wide problem. He got much more specific when talking about over regulation, noting that the government’s decision to implement exploration plans and permits, map staking, the Far North Act and the overzealous renewal of the Mining Act, are hindering the exploration and mining industry. These changes, he said, “when this compounded by eco-centric government policies from other ministries spells disaster.”

When speaking about the provincial government’s dealings with First Nations, the NPA president issued a warning, saying, “First Nation empowerment at the expense of the mining and exploration industry which if unabated maybe the contagion that will spill off to other business sectors, private land holders, farmers and even municipalities.

Quebec To Decide On Canada’s Largest Open-Pit Mine Within Town Limits – by Catherine Lévesque (Huffington Post – February 19, 2015)

February 20, 2015

http://www.huffingtonpost.ca/business/

SEPT-ÎLES, Que. – The Quebec government is expected to make a decision any day now on the development of Canada’s largest open-pit mine near an inhabited area.

Environment Minister David Heurtel is trying to balance a difficult economic situation in Quebec’s North Shore with serious environmental concerns. If it is approved, the Arnaud mining project will extract apatite, phosphate minerals used for fertilizers, roughly six kilometers as the crow flies from downtown Sept-Îles.

The Bureau d’audiences publiques sur l’environnement (BAPE), an independent agency that reports to the Ministry, said in a report last year that the project was “unacceptable” in its present form. The risk of water contamination and landslides are simply too high, said BAPE, an advisory body that has no decision-making power.

Sept-Îles is located in Quebec’s northeastern territories, approximately 600 kilometers from Quebec City. Its economy is heavily dependent on mining by large, multinational companies, but it has taken a severe blow with recent layoffs at Cliffs Natural Resources.

According to its supporters, the Arnaud mine would create jobs and diversify the local economy. But opponents say having an open-pit mine within city limits is too risky. Sept-Îles currently has just one source of drinking water and no alternatives in case of contamination.

Barrick goes back to mining roots with focus on gold – by Rachelle Younglai (Globe and Mail – February 20, 2015)

February 20, 2015

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Barrick Gold Corp. founder Peter Munk had a vision for his company. Barrick’s new chairman John Thornton has another one.

Less than a year on the job as chairman, Mr. Thornton appears to have killed Mr. Munk’s dream of turning Barrick into a giant diversified mining company, and plans to forge a deep business relationship with China are no longer on the table.

Instead, Mr. Thornton wants the world’s biggest gold producer to return to its roots when it was a nimble operator with an entrepreneurial spirit, a streamlined corporate structure and a pristine balance sheet that earned a top credit rating.

Barrick, like the rest of the gold industry, was forced to clamp down on expenses when bullion began plummeting in 2011. Under Mr. Munk and previous management, Barrick had started becoming leaner by selling and suspending expensive operations and shrinking production.

But Mr. Thornton suggested Barrick had lost its way over the past decade and is pushing the company back to its “original DNA.” Gone are the layers of managers between Barrick’s executives and the 19 mines that it operates. Barrick’s Toronto headquarters is now a skeleton crew of 150, compared with 500 in its heyday.

Comment: Mines minister must not ignore his own experts – by Calvin Sandborn , Mark Haddock and Jamie Arbeau (Victoria Times Colonist – February 20, 2015)

February 20, 2015

http://www.timescolonist.com/

“The panel firmly rejects the notion that business as usual can continue.” — Mount Polley Expert Review Panel

In all the fuss about the execution of search warrants in the Mount Polley Mine disaster case, we shouldn’t lose sight of the main issue — how do we prevent the next disaster?

Indeed, Mines Minister Bill Bennett commissioned the Mount Polley expert panel “to ensure this never happens again.” So why is the minister dodging commitment to the panel’s most important recommendation? Why has he failed to endorse that vital recommendation — and shuffled it off to bureaucrats for extended “review”?

Here’s the issue: The panel noted that more tailings lakes and ponds will inevitably fail — and recommended that the province move to eliminate such water impoundments across the province, in both new and closed mines. Criticizing construction of tailings ponds as “century-old technology,” they called for dry disposal of tailings.

The panel pointed out a central problem: For tailings lakes to work, everything has to go right, all the time and forever. But human error inevitably intervenes. For example, the panel exposed the incompetent ad hoc management of the Mount Polley tailings lake.

Cliffs to return to core business – by John Pepin (Mining Journal – February 19, 2015)

February 20, 2015

http://www.miningjournal.net/

MARQUETTE – The top executive for Cliffs Natural Resources said Wednesday the mining company continues to pursue a “rock solid” revitalization strategy of shutting down and selling off its diverse assets elsewhere, reducing debt, and focusing on iron ore production in the Upper Great Lakes region.

“We are back to basics,” said Lourenco Goncalves, Cliffs’ chairman, president and chief executive officer. “We are back to our business, to our real business, the business that made Cliffs a big company, the business that made Cliffs a powerhouse in the United States and abroad and that is producing iron ore in Michigan and Minnesota and that’s it. That’s our business.”

From coal to chromite, from Australia to Canada and the southeastern United States, under previous board management, Cliffs diversified and expanded.

“Everything else was done through a strategy that was not the best one for the company – that was not the best one for the community that the company serves,” he said. “Lots of money was spent and wasted in bad investments we’re correcting all that.”

Goncalves said Cliffs’ now realizes those “mistakes of the past.”

EDITORIAL: Investors balk at unpredictable law (Business Day Live – February 20, 2015)

February 20, 2015

http://www.bdlive.co.za/

THE government is inclined to dismiss warnings that its policy choices could discourage foreign investment as either exaggerated or without foundation. But that stance is starting to appear decidedly shaky as investors break their silence to object to opaque lawmaking, and international data on foreign direct investment flows point to a loss of interest in SA as an investment destination.

Anglo American CEO Mark Cutifani recently objected to the government’s decision to reopen debate over minerals pricing, saying this reversal had created mistrust and put SA’s credibility at risk internationally. Meanwhile, private equity firms polled by Bloomberg say returns from South African investments have been shrinking for a decade, making West and sub-Saharan Africa more attractive due to their ability to offer a higher internal rate of return.

Yet despite paying lip service to the need for foreign investment and the importance of policy predictability and business confidence, the government continues to promote and promulgate laws that do the opposite. The draft Expropriation Bill that is now before Parliament, for example, is intended to form the foundation for the pending Protection and Promotion of Investment Bill, which replaces bilateral investment treaties, and the Regulation of Land Holdings Bill, which will ban foreigners from buying agricultural land and limit the size of existing farms to 12,000ha.

Yet it is silent on how it will interact with the Property Valuation Act that was promulgated last year, which provides for the establishment of an office of the valuer-general whose job it will be to value property earmarked for expropriation. This law was intended to overcome the land reform logjam, which the government blames on the failure of the “willing buyer, willing seller” principle.

Indonesia to allow mine contract extension earlier than 2 yrs out – by Wilda Asmarini (Reuters India – February 20, 2015)

February 20, 2015

http://in.reuters.com/

JAKARTA – Feb 20 (Reuters) – Indonesia will start allowing miners to renew contracts earlier than two years before expiry, the mines minister said on Friday, a move that would favour Freeport-McMoran Inc and its expansion plans at one of the world’s largest copper mines.

Southeast Asia’s largest economy is currently in talks with miners over their plans to develop domestic smelting and processing facilities, and earlier this week indicated that it could also ease a planned 2017 export ban on copper and other mineral concentrates.

The government’s willingness to show more flexibility comes after U.S.-based Freeport pushed ahead with expansion plans at Indonesia’s sole copper smelter at Gresik and gave its support to a government-backed industrial zone in Papua.

“The government regulation for extension proposals that regulates a minimum of two years before a contract expires will be revised,” Sudirman Said, Indonesia’s energy and mineral resources minister, told reporters.

Said did not say how early mining companies would be able to propose extensions but noted that oil and gas concession holders can propose renewals up to 10 years before a contract expires.

Potash Price War Looms With Belarus Seeking Share: Commodities – by Yuliya Fedorinova (Bloomberg News – February 19, 2015)

February 20, 2015

http://www.bloomberg.com/

(Bloomberg) — The potash industry, which provides the potassium used to grow bigger fruits and vegetables worldwide, is facing a global price war as Belarus seeks to strengthen its share of the $20 billion market. The Eastern European country, which supplied 20 percent of global exports last year, is running mines at almost full capacity to gain a foothold in the U.S. and in China, at a time when the Asian nation is in talks with other providers of the plant nutrient, analysts and competitors say.

The moves come a year-and-a-half after the once-staid market was thrown into chaos when Russia’s PAO Uralkali unexpectedly terminated its relationship with Belarus’s state-owned producer Belaruskali. That venture used to control 40 percent of exports, helping to maintain stable prices.

“The real price war has already started,” said Oleg Petropavlovskiy, an analyst at BCS Financial Group in Moscow. “Belarus is offering lower prices in some regions, while running close to full capacity. It’s the key threat now for the global potash market and will not abate any time soon.”

Potash, used by farmers as an important fertilizer for their plants, is mined deep underground, in areas where water from ancient seas dried up and disappeared, leaving behind potassium salts. Total demand for the nutrient reached a record high of about 62 million tons last year as farmers in Brazil, China and North America increased consumption.

Bad times for Canada’s big gold miners – by Lisa Wright (Toronto Star – February 20, 2015)

February 20, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Barrick, Goldcorp take massive Q4 writedowns amid weak gold prices.

Barrick Gold Corp. chairman John Thornton’s message to Bay Street came through loud and clear: he wants to take the world’s largest gold producer back to its roots as a smaller company with fewer mines and micro-managers — and hopefully return it to profitability.

To that end, the Toronto mining giant is slashing staff at headquarters by nearly half and selling two Asia-Pacific mines. It will be “laser focused” on reducing its debt by $3 billion this year amid rocky times in the mining industry and a weak gold price, he told analysts on a conference call Thursday.

It wasn’t a banner day for either of Canada’s two largest bullion miners, as Vancouver-based Goldcorp Inc. reported a loss of $2.4 billion (U.S.) in its latest quarter as it wrote down the value of its Cerro Negro mine in Argentina. Barrick also reported a massive $2.85 billion fourth-quarter loss due to an after-tax impairment charge on its soon-to-be closed Lumwana copper mine in Zambia and the Cerro Casale project in Chile.

Gold miners are struggling as the gold price has lost 35 per cent of its value since its peak of $1,900 (U.S.) an ounce in 2011 and as the industry suffers through a brutal downturn following a 13-year market rally.

Lives Transformed: Education and the Iron Range – by Pamela A. Brunfelt (Home Town Focus – February 20, 2015)

February 20, 2015

http://www.hometownfocus.us/

Dear Readers,

Earlier this year Pam Brunfelt, distinguished historian, Vermilion Community College instructor and HTF contributor made available, through the Iron Range Resources and Rehabilitation Board, four history articles that she researched and wrote.

One of those pieces, “The Arsenal of Democracy: Minnesota’s Iron Ranges in WWII,” was published in the January 2, 2015, edition of Hometown Focus. This week we’re sharing “Lives Transformed: Education and the Iron Range.”

These, and the remaining two pieces to be shared at a later date (“At the Center of Life: Women on the Iron Range” and “Industrialization and the Iron Range”), collectively comprise the IRRRB project, “Mining Our History.”

All four of Brunfelt’s history pieces can be accessed online at: http://mn.gov/irrrb/DataCenter/History/walk-through-our-history.jsp – Cindy Kujala – HTF Staff Writer

Mining changed the landscape of the Iron Ranges, and mining taxes created one of the finest education systems in the United States. Education served three purposes. First, to provide alternatives to employment in the mines; second, to transform a polyglot immigrant culture into a new Iron Range identity based on American values; and third, to provide a path to citizenship for thousands of immigrants in the first decades of the twentieth century.

Letter from: the blast furnaces of Kryvyi Rih, Ukraine’s decaying industrial heartland – by Alan Turgutoglu (Calvert Journal – February 19, 2015)

February 20, 2015

http://calvertjournal.com/

The Calvert Journal is a daily briefing on the culture and creativity of modern Russia.

Ugly cities are plentiful in Ukraine, but Kryvyi Rih, a city in central Ukraine’s Dnipropetrovsk region, is uglier than most. Its skyline of towering pit heads and blast furnaces extends for 130 km across the horizon, following the line of the region’s iron ore deposits. The city has the odd distinction of being the longest city in Europe.

The statue of Lenin still looks proudly upon his labourers, even though many of the iron ore mines are now long closed. In a country where nobody minds the rashes from bathing in the polluted seas and rivers in summertime, this city is dirty enough to make people want to leave. What brought me here were the stories of former inhabitants who left and who told me that the pollution is so bad that houses, cars and even cats and dogs are constantly coated in red dust, a by-product of the ore extraction process. Upon arrival I was welcomed by a cloud of smog unlike anything I’ve seen in Ukraine, rivalling that of some Chinese cities.

It’s worse in the evening, when the sky is covered with brownishred clouds of smoke. The chemical smell is nauseating. “It’s probably because these plants function at lower capacity in the morning and afternoon, then go up to full capacity in the evening.

People are less likely to complain then,” Andrei, 28, tells me. He’s a foreman in a metallurgical plant at a full-cycle combine, a complex which carries out the complete iron production process from the moment the ore is extracted from underground all the way to casting the metal bars which are then shipped across the country.